US Bancorp's Record $7,970 Million Revenue Came With A $135 Million Card-Portfolio Provision
Third-quarter earnings per share were $1.34 against $1.22 a year earlier, and the bank lifted its operating leverage outlook for 2026.
US Bancorp reported record third-quarter net revenue of $7,970 million, according to an 8-K filed Thursday, with net interest income up 5.6% and fee revenue up 14.9% from a year earlier. Diluted earnings per share were $1.34, up 9.8% from $1.22 but down from $1.35 in the second quarter.
What the results show
Net income attributable to the bank was $2,202 million, up 10.0% year over year. The net interest margin, the spread earned on lending over funding costs, was 2.84%, against 2.75% a year earlier and 2.79% in the second quarter.
Capital markets revenue rose 69.3% from a year earlier to $640 million. The company credited the BTIG acquisition for the increase, and the second quarter held only part of BTIG's results.
Average loans rose 8.0% from a year earlier and average deposits rose 2.9%. The efficiency ratio, which measures expenses against revenue, improved to 55.9% from 57.2% a year earlier. The common equity tier 1 capital ratio was 10.8%, against 10.9% a year earlier.
The credit card purchase and the provision
The provision for credit losses was $654 million, against $571 million a year earlier and $538 million in the second quarter. The release says the year-over-year rise was primarily driven by an initial $135 million provision on a purchased small business credit card portfolio, partly offset by an improved economic outlook and favorable credit performance.
Credit quality was otherwise steady. The net charge-off ratio was 0.51%, against 0.56% a year earlier, and nonperforming assets were $1,324 million, against $1,654 million.
Noninterest expense rose 7.1% to $4,493 million, which the release attributes mainly to BTIG, along with higher pay, technology and marketing costs.
What it changes
CEO Gunjan Kedia called the quarter strong and said the bank reported "a full quarter of BTIG results." The release also describes the bank's small business push, including two new credit cards, Business Essentials and Business Essentials Plus.
For 2026, the earnings presentation guides to total net revenue growth of 8% to 9%, against a prior 7% to 9%. The low end moved up, so the range narrowed. Positive operating leverage, meaning revenue growing faster than expenses, is now about 300 basis points, up from a prior outlook of roughly 200.
The fourth-quarter guidance in the presentation calls for net interest income up 6% to 7% and fee revenue up 13% to 14% from the prior-year quarter.
